Brent crude drops $20/bbl as US oil floods European market
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Brent crude futures plunged by $20 per barrel on July 15, settling at $65.12, as a surge in US oil exports overwhelmed European storage capacity. The drop marks the largest single-day decline since March 2020, triggering emergency meetings among OPEC+ delegates.
The Price Collapse
Brent crude for September delivery fell $20.03 to settle at $65.12 a barrel on the ICE Futures Europe exchange, the lowest close since December 2021. The selloff accelerated after data showed US crude exports hit a record 6.8 million barrels per day last week, with much of that volume heading to European refineries. European onshore storage at the Amsterdam-Rotterdam-Antwerp hub stood at 98% capacity as of July 13, according to Genscape.
Market Dynamics
The price crash was driven by a confluence of oversupply and weakening demand. US shale producers, responding to higher prices earlier in the year, boosted output to 13.4 million bpd, the highest since April 2020. Meanwhile, European industrial demand has softened amid a manufacturing slowdown, with Germany's PMI falling to 47.2 in June. The spread between Brent and WTI narrowed to $1.50, the smallest since 2018, reflecting the glut in the Atlantic Basin.
OPEC+ Response
OPEC+ delegates held an emergency videoconference on July 15 but failed to agree on output cuts, with Saudi Arabia pushing for a 1 million bpd reduction and Russia opposing any change. The alliance is scheduled to meet again on July 22 in Vienna. Iraq and the UAE have signaled they would resist cuts, arguing that US producers should bear the burden of rebalancing the market.
What's Next
OPEC+ will hold its next scheduled meeting on July 22 in Vienna, where members are expected to debate production quotas. It remains unclear whether Saudi Arabia can secure consensus for a cut, and analysts warn that without coordinated action, Brent could test $60 a barrel.
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Brent crude drops $20/bbl as US oil floods European market
